How banks can build a robust corporate governance mechanism

China Construction Bank was transformed into a joint-stock commercial bank and established a new modern corporate management structure, clarifying the rights and responsibilities of the general meeting of shareholders, the board of directors, the board of supervisors and senior management. CCB's goal is to establish a scientific and efficient decision-making, implementation and supervision mechanism in accordance with the principle of "separation of three committees, separation of powers, effective restraint and coordinated development", so as to ensure the independent operation of all parties and effective checks and balances.

General Meeting of Shareholders. The General Meeting of Shareholders is the authority of China Construction Bank Co., Ltd., which makes decisions on major matters of the bank in accordance with the law, including the review and approval of the profit distribution plan, the annual financial budget plan and the final account plan, the change of registered capital, the issuance of bonds, the merger, the division and the amendment of the articles of association.

Management Board of Directors Board of Supervisors Management Name Position Name Position Name Position Wang Hongzhang Chairman and Executive Director Zhang Furong Chairman of the Board of Supervisors Zhang Jianguo Vice Chairman, Executive Director and President Zhang Jianguo Vice Chairman, Executive Director and President Liu Jin Supervisor Zhu Hongbo Vice President Ren Zhigang Independent Non-Executive Director Song Fengming Supervisor Zhang Gengsheng Vice President Jenny Shipley Independent Non-Executive Director Zhang Huajian Supervisor Hu Zheyi Vice President Irene Ruoshi Independent Non-Executive Director Jin Panshi Employee Representative Supervisor Pang Xiusheng Vice President Zhao Xijun Independent Non-Executive Director Li Weiping Employee Representative Supervisor Zhao Huan Vice President Huang Qimin Independent Non-Executive Director Zeng Jianhua Chief Financial Officer Wang Yong Non-Executive Director Huang Shuping Employee Representative Supervisor Huang Zhiling Chief Financial Officer Zhu Zhenmin Non-Executive Director Yu Jingbo Chief Audit Officer Li Xiaoling Non-Executive Director Dai Deming External Supervisor Chen Caihong Secretary of the Board of Directors Chen Yuanling Non-Executive Director Xu Huibin Wholesale Business Director Dong Shi Non-Executive Director Guo Feng External Supervisor Tian Huiyu Retail Business Director Wang Guiya Investment and Wealth Management Director.

Strictly follow the relevant provisions of the Company Law and the Articles of Association of Mintai Bank to select and appoint qualified directors, supervisors and senior managers. The new board of directors and the board of supervisors were elected by the resolution of the first extraordinary general meeting of shareholders in 2010, of which the board of directors is composed of 4 executive directors, 5 shareholder directors and 2 independent directors; The Board of Supervisors consists of 1 shareholder supervisor, 2 employee supervisors and 2 external supervisors. The senior management consists of 1 President and 4 Vice Presidents; The directors and senior executives have been formally appointed after obtaining the approval of their qualifications in accordance with the regulatory requirements, and the supervisors have also met the requirements of the regulatory authorities.

In order to build a good mechanism of checks and balances and supervision and restraint, Mintai Bank has established and improved the system of professional committees, independent directors and external supervisors. The Board of Directors of Mintai Bank has set up the Audit Committee, the Risk Management Committee, the Related Party Transaction Control Committee, the Nomination and Remuneration Committee and the Development Strategy Committee. At the same time, we have hired experts and academics who meet regulatory requirements to serve as independent directors and outside auditors, and the independent directors and external auditors are diligent and conscientious, and actively and independently express their opinions.

The banking governance system refers to a series of organizational and institutional arrangements that regulate the development of the banking industry and maintain the sound operation of the banking industry. With the successful completion of the shareholding system reform of state-owned commercial banks, the corporate governance structure of modern commercial banks has taken shape, and comprehensively deepening the reform of the governance system has become the focus of China's banking reform. The top priority at the moment is to adapt to the new trends and characteristics of the group, diversified and integrated operation of banks, and the development of cross-border, cross-industry and cross-market, and further improve the four major systems of corporate governance, business governance, risk governance and industry governance.

In terms of corporate governance, on the basis of consolidating the achievements of the shareholding system reform in the past decade, the focus should be on improving and perfecting the governance structure of the "three committees and one layer" and the operating mechanism with effective checks and balances and compatible incentives. At the same time, we should actively improve the performance appraisal methods, guide the establishment of a correct outlook on political performance and development, and gradually reverse the blind expansion inertia thinking of pursuing high growth in scale, high performance indicators, and high profit growth.

In terms of business governance, on the basis of consolidating the front, middle and back office separation mechanism, according to different business characteristics, we will promote the reform of the branch system, the line division system, the franchise department system and the subsidiary system. The reform of the branch system refers to the operation and management of traditional businesses such as deposits and loans in the banking industry in accordance with the principle of authorized operation, and the operation and management of branches at different levels and within their respective jurisdictions. The reform of the line business division system refers to the business products with high requirements for the design, development, operation and management of credit cards, wealth management, private banking, etc., and the marketing involves a wide range of business products, and the business department of the head office designs the products in a unified manner, and other departments and branches are only responsible for product sales.

The reform of the monopoly department system refers to the establishment of a franchise department by the headquarters of a legal person to operate the business that is highly professional and technical in the daily operation of the same industry and investment, and is not suitable for decentralized management, and other departments and branches are no longer operational. The reform of the subsidiary system refers to the establishment of special subsidiaries for non-bank financial businesses operated by banks, such as trusts and leasing, to operate independently and account independently, and to strictly establish a "firewall".

In terms of risk governance, on the basis of consolidating and strengthening the credit risk management and control mechanism, and in view of the objective reality of the rapid development of banks' off-balance sheet business, the obvious trend of group operation, and the accelerated pace of "going out", we will promote the comprehensive risk management of group consolidation on and off the balance sheet, domestic and foreign, domestic and foreign currencies, and parent and subsidiary companies, and establish a full-caliber hierarchical capital occupation and risk provision system covering non-credit and off-balance sheet assets in accordance with the principle of substance over form, and at the same time strengthen the main responsibility of the group's risk management. Further clarify the supervisory responsibilities of regulators.

In terms of industry governance, on the basis of consolidating the construction of the self-discipline mechanism of industry associations, we will focus on strengthening the functions of service and mutual assistance. On the one hand, it is necessary to speed up the building of trade associations in light of the actual conditions of bank management and development. On the other hand, it is necessary to accelerate the construction of infrastructure such as relevant product registration information systems through industry associations, so as to lay the foundation for improving information transparency and strengthening market supervision.

According to the requirements of risk prevention and control, we should also take the opportunity to promote the construction of mechanisms such as mutual assistance in the industry, and further build and improve the self-help line of defense to maintain the stability of the industry.